annual report 2016 - tibiyo annual...dr. absalom themba dlamini fipha dlamini managing director...
TRANSCRIPT
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ANNUAL REPORT 2016
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Contents
PRESENTATION TO HIS MAJESTY THE INGWENYAMA
MISSION STATEMENT
OBJECTIVES OF THE ORGANISATION
CORPORATE DETAILS
CHAIRMAN’S STATEMENT
MANAGING DIRECTOR’S REPORT
TIBIYO MAIN COMMITTEE
CORPORATE GOVERNANCE
TIBIYO TAKA NGWANE INVESTMENTS
FINANCIAL STATEMENTS
3
4
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5
6 - 8
9 - 11
12 -13
14
15
16 - 41
TIBIYO TAKA NGWANE ANNUAL REPORT 2017 1
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HIS MAJESTY INGWENYAMA KING MSWATI III
2 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
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PRESENTATION TO HIS MAJESTY THE INGWENYAMA
Ngwenyama Ndvuna,
Libandla leTibiyo (the Main Committee of Tibiyo) is honoured and privileged to present the Annual Report for the financial year
ended 30 April 2016, covering:
Review of operations of the organisation
Audited Financial Statements
Tibiyo’s Social Responsibility.
May it please your Majesty to receive this report.
BAYETHE! WENA WAPHAKATHI!!
Dr. Absalom Themba Dlamini Fipha Dlamini
Managing Director Chairman
TIBIYO TAKA NGWANE ANNUAL REPORT 2017 3
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4 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
THE OBJECTIVES OF THE ORGANISATION
MISSION STATEMENT
To complement Government in fostering economic independence and self sufficiency;
To increase formal sector employment;
To increase income in the hands of citizens;
To earn and/or save foreign exchange;
To develop the rural communities of the Kingdom;
To foster and support the maintenance of Swazi tradition and cultural heritage;
To assist financially and materially in the education and training of citizens.
To meet its objectives, Tibiyo Taka Ngwane actively promotes the establishment of commercially viable projects
in all sectors of the economy. These projects must satisfy the following criteria:
• National desirability;• Economic viability;• Technical feasibility;• Profitability.
In playing its developmental role, Tibiyo Taka Ngwane cooperates with and appreciates assistance from national
and international investment organisations. It also invites suitable and experienced local as well as foreign
business entities to either form business partnerships or manage its wholly owned projects.
Tibiyo Taka Ngwane (Tibiyo) is a Swazi Nation Organisation that is at the core of the social, cultural and economic development of the Swazi people.
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 5
PHYSICAL ADDRESS POSTAL ADDRESS
Lomawa House P. O. Box 181
Lozithehlezi Kwaluseni
M201
TELEPHONE
+268-25101978/9
+268-25101390
+268-25101399 (Fax)
+268-25101306 (Fax)
AUDITORS BANKERS
KPMG
Umkhiwa House
Lot 195 Kal Grant Street
MBABANE
CORPORATE DETAILS
African Alliance Swaziland
First National Bank of Swaziland Limited
Nedbank Swaziland Limited
Standard Bank Swaziland Limited
Stanlib Swaziland
SwaziBank
Swaziland Building Society
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TIBIYO TAKA NGWANE ANNUAL REPORT 2016
Prince Fipha Chairman
“
The achievements of the organisation in 2017 would
not have been possible without the tireless efforts of
the Executive Management, Management and the entire
staff of Tibiyo, together with the able leadership and
management of its associate and subsidiary companies.
CHAIRMAIN’S STATEMENT
6 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
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TIBIYO TAKA NGWANE ANNUAL REPORT 2016
L ibandla leTibiyo (the Main Committee of Tibiyo) is honoured
and privileged to publish the Audited Annual Financial
Statements of Tibiyo Taka Ngwane for the year ended 30
April 2017, which reflects a 72%, growth in net income.
Tibiyo has invested in the following sectors of the economy:
Agriculture, Commercial, Finance, Services, Property, Mining,
Manufacturing and Processing as well as Tourism.
Revenue from Third Party managed projects increased by 18%
during the reporting period. Interest received from investments
increased by 37.8% and dividends received from investments
showed an increase of 36.7%. Tibiyo’s share of partnership
earnings decreased by 6.8% compared to prior year. The above
factors combined, resulted in a 25.5% increase in revenue for
the review period.
ESWATINI NATION DEVELOPMENT EXPENDITURE
Despite the harsh economic environment, Tibiyo Taka Ngwane
managed to carry out its mandate of developing the nation of
the Kingdom of Eswatini. This includes the promotion of health,
welfare, education and housing of the nation of Eswatini.
The organisation was able to provide efficient services to the
various cultural and traditional institutions of Eswatini, fund
traditional ceremonies, make donations, as well as other areas
that the Ingwenyama considered beneficial to Eswatini.
The Eswatini Nation Development Expenditure increased by
32.2% overall, compared to prior year, mainly due to a 21.8%
increase in expenditure towards bursaries and scholarships and
national ceremonies expenditure which grew by 38.8%.
During the reporting period, a total of 250 new bursaries
and 68 scholarships were awarded. Sixty two (62) students
sponsored by Tibiyo Taka Ngwane completed their tertiary
education during the year, and 320 pupils completed their high
school education under bursaries sponsorship. A total amount
of E38.62 million was spent on bursaries and scholarships in
2017, compared to E31.70 million in 2016.
DOMESTIC ECONOMIC PERFORMANCE
The country’s Gross Domestic Product is estimated to have
grown by 1.9% in 2017, compared to 1.4% in 2016. As
the country experienced recovery from the drought of the
previous two years, improved weather conditions, particularly
the above normal rains received in 2017, impacted positively
on agricultural production, agro-processing, water supply and
hydro-power generation, according to the Central Bank of
Eswatini’s Economic Review Report.
From a decline of 5.6 % in 2016, the primary sector is estimated
to have increased by 0.7% influenced mainly by crop production,
which grew by 17.2%, largely dominated by sugarcane,
following a decline of 21.9 % the previous year. Maize output
rose from 33,462 metric tons in 2015/16 harvesting season
to 84,000 metric tons in the 2016/17 harvesting season.
Sugarcane production on the other hand rose by 7.2% in 2017
following a decline of 14.7% the previous year.
The secondary sector is estimated to have grown by 0.7% in 2017
from 0.5% the previous year. The main contributing factor was
manufacturing, in particular agro-processing, electricity and water
supply. Manufacturing output is estimated to have increased by
1.8%, mainly supported by an increase in sugar production.
The mining sector saw coal production growing from 158,418
metric tonnes in 2016 to 202,277 tonnes in 2017, a 27.7%
growth. The increase in production volumes was a result of
continuous improvement in coal yields. Quarry stone production
TIBIYO TAKA NGWANE ANNUAL REPORT 2017 7
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TIBIYO TAKA NGWANE ANNUAL REPORT 2016
CHAIRMAIN’S STATEMENT
meanwhile, decreased from 419,642 cubic metres in 2016 to
291,100 cubic metres in 2017, a 30,6% decline.
The Lilangeni weakened against major external currencies
partly due to global and domestic factors in South Africa. The
Lilangeni remains vulnerable to significant global market events.
GLOBAL ECONOMIC OUTLOOK
The Global Economy in 2017 grew by 3.8% and is expected to
grow by 3.9%, in 2018 and 2019 according to the World Economic
Outlook projections. Growth in emerging markets and developing
economies is expected to rise to 4.9% in 2018 following a 4.8
% expansion in 2017, while growth in advanced economies is
expected to be increase. Looking ahead, emerging markets and
developing economies are expected to expand by 5.1% in 2019.
The South African economy grew by 1.3% in 2017, and
exceeded expectations of 1.0% growth announced earlier. The
growth was driven by the agricultural sector bouncing back from
one of the worst droughts in recent history. The sector grew by
17.7% in 2017.
FUTURE OUTLOOK
Prospects for the country remain indigent as a result of slow
economic growth and a decline in Foreign Direct Investments.
Southern African Customs Union (SACU) revenues are also
projected to decline in 2018.
ACKNOWLEDGEMENTS
The achievements of the organisation in 2017 would not have
been possible without the tireless efforts of the Executive
Management, Management and the entire staff of Tibiyo,
together with the able leadership and management of its
associate and subsidiary companies.
In a special way, I recognise with appreciation, the dedication
and commitment of the Main Committee, together with their
valued support and guidance at all times.
Last but not least, on behalf of the Main Committee,
Management and Staff; I acknowledge with gratitude and
honour, the wise counsel and guidance of His Majesty King
Mswati III throughout the year.
BAYETHE, WENA WAPHAKATHI !!!
PRINCE FIPHA
Chairman
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TIBIYO TAKA NGWANE ANNUAL REPORT 2016
Dr. Absalom Themba Dlamini Managing Director
MANAGINGDIRECTOR’SREPORT
As part of its diversification strategy, the organisation will continue to
explore opportunities in the property portfolio with a view to grow this
sector. In addition, the good rains projected for the country going forward,
call for an aggressive pursuit of new initiatives in the agricultural portfolio
which will create more job opportunities and generate better revenues.
TIBIYO TAKA NGWANE ANNUAL REPORT 2017 9
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10 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
During 2017, the Swaziland economy was on the recovery path,
following the severe drought suffered by the entire country
in 2016 where Tibiyo Taka Ngwane investee companies and
subsidiaries were also affected.
Tibiyo saw an increase in revenue from E239 million in 2016 to
E300 million in 2017, a 26% increase. The main contributing
factor to this growth was an increase in dividends received from
investee companies. Some of the investee companies, especially
in the sugar industry, who adopted new strategies to counter the
prolonged drought effects, were able to reap positive spinoffs,
which saw them achieving budgeted profits, which is commendable.
Net income achieved increased from E145 million to E250 million,
a 72% increase. Total assets, grew from E1.8 billion to E2 billion,
signifying growth of 9%.
SUGAR MATTERS
As sugar accounts for a major portion of Tibiyo’s revenues, it is of
paramount importance to monitor the performance of this industry
and developments thereof.
According to the Swaziland Sugar Association (SSA), in the
reporting period, sugar production increased by 10.9% from
586 085 tons to 650 126 tons, whilst sales revenue declined by
8.8% from E4.6 billion to E4.2 billion in 2017. The decrease in
revenues was mainly due to depressed market prices and lower
sales volumes. Actual sales decreased by 11% from 621 024 tons
to 552 135 tons. Sales to the SACU market decreased by 13.5%
whilst sales to the EU decreased by 36%.
Molasses production increased by 1.5% from 239 337 tons to
242 889 tons. Yields (tons sucrose per hectare) increased from
13.97 to 14.01.
In terms of the short-term outlook for the industry, the evolving
world market conditions, together with the erosion of value in
what were historically preferential markets will remain a challenge.
While the country, as a signatory of the SADC-EU EPA, benefits
from duty-free quota-free access into that market, there is very
little value obtained from sales to that market due to the decrease
in value attainable.
The EU has become a surplus producer and exporter of sugar,
requiring less volumes of imported sugar. Alternative markets in
the East and Southern African region are being actively pursued to
divert sales from the EU market.
The restoration and maintenance of a significant level of protection
of the SACU market through the tariff mechanism in place, is
pertinent to enable the movement of sales into the SACU market.
The deficit regional market (SADC, COMESA and EAC) continues
to present an opportunity for sales into this region. Ongoing
expansions in the sugar producing countries in the region have
translated into a resistance in opening their markets for regional
sugar imports. Anti-sugar campaigns and the rollout of taxes on
sugar containing beverages (commonly termed, the sugar tax)
stands to dampen the demand for sugar.
Sugarcane growing is a large user of water, and water management
for growing of the crop is important for the sustainability of the
industry and environment. With the lessons learnt from the
drought period coupled with increased efficiencies in water use
and irrigation, sugar production is expected to return to levels prior
to the peak of the 2016 drought.
The key to viable and sustainable sugarcane production is keeping
costs of production low, while improving operational efficiencies.
The annual 15% increase in electricity effected in the 2016/17
and 2017/18 financial years, significantly increased the energy
cost of growing sugarcane. With the crop being 100% irrigated,
and irrigation costs making up more than 50% of the overall crop
upkeep, this increase will continue to put pressure on the growers.
The need for alternative and renewable sources of energy for
the irrigation of the crop is becoming imminent with the rise
of irrigation costs. There is also a need to adopt and harmonise
MANAGING DIRECTOR’S STATEMENT - continued
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 11
other cost reduction initiatives throughout the industry to retain
value. The SSA will continue to aggressively pursue strategies
that will create sustainable value by focusing on improving the
competitiveness of the industry.
SOCIAL RESPONSIBILITY
In 2017, Tibiyo continued to complement Government’s
development effort through education and training. An amount
of E38.6 million was spent on Bursaries and Scholarships, whilst
E36 million was spent on National Ceremonies within the culture
and traditions portfolio. An amount of E0.4 million was spent on
Donations from E0.1 million spent the previous year.
LONG SERVICE AWARDS
A number of members of staff received long term service awards in
2017. They were awarded as follows:
Mrs Sonile Dlamini - 30 years
Mr William Malaza - 25 years
Ms Phila Dlamini - 30 years
Mrs Nonhlanhla Shongwe - 15 years
Mrs Precious Khumalo - 15 years
Mrs Nomathemba Simelane - 15 years
Tibiyo congratulates these employees and wishes them many years
ahead that are more fruitful in the service of the organisation. Their
loyalty is much appreciated.
RECRUITMENTS
The following members of staff joined the organisation in 2017
1. Vusasive Dlamini - HR Officer
2. Nqabeni Mdlovu - Estates Officer
3. Nyakwesi Motsa - Accountant
4. Simangele Mndzebele - Information Technology
Officer
5. Sibongiseni Mamba - Communications Officer
RETIREMENTS
In 2017, the organisation bid Mrs Sonile Dlamini and Mr Tyrone
Sons farewell as they retired following many years in which
they served the organisation with loyalty and dedication. Their
contribution is much valued.
FUTURE OUTLOOK
The organisation is bracing itself for tough times ahead in light of
a bleak economic outlook going forward and adverse conditions
in the sugar industry, where Tibiyo is heavily invested, mainly
challenges in accessing global sugar markets and the sugar price
volatility.
As part of its diversification strategy, the organisation will continue
to explore opportunities in the property portfolio with a view
to grow this sector. In addition, the good rains projected for
the country going forward, call for an aggressive pursuit of new
initiatives in the agricultural portfolio which will create more job
opportunities and generate better revenues.
APPRECIATION
On behalf of Management and the entire staff, I extend my sincere
gratitude to His Majesty King Mswati III, for his wise leadership in
2017. I also thank profoundly, the Main Committee for its support
and guidance throughout the year.
To the Management and staff, I extend my appreciation for their
continued commitment towards achieving the vision and mission
of the organisation.
BAYETHE, WENA WAPHAKATHI !!!
DR. ABSALOM THEMBA DLAMINI
Managing Director
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HRH Princess Sidvumolesihle Chief Ndzabankulu SimelaneHRH Prince Simelane
Chief Ndlaluhlaza Ndwandwe Dr. Absalom Themba Dlamini Mrs. Nokukhanya Gamedze
Prince Fipha
THE MAINCOMMITTEE
12 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
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Mr. Sigodvo Motsa Mr. Khephu Cindzi Ms. Lindiwe Chola Dlamini
Ms. Nonhlanhla Shongwe Mr. John MngomezuluMr. Manqoba Khumalo
Mr. Winston Lomahoza Mr. Vusi FakudzeMr. Mvuselelo Fakudze
TIBIYO TAKA NGWANE ANNUAL REPORT 2017 13
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During the year under review, the Main
Committee consisted of 13 members.
Two members resigned. These were Mr.
Mvuselelo Fakudze and Mr Manqoba
Khumalo.
There are three sub-committees of the
Main Committee, the Audit Committee,
the Remuneration Committee and the
Investments Committee, to which specific
duties and responsibilities are delegated
by the Main Committee.
The External Auditors have unrestricted
access to all of Tibiyo’ s Committees and
all the organisation’s records. Their duty is
to report on the maintenance of effective
internal controls over the organisation’s
business.
Chairman
The Chairman is a non-executive member
of the Main Committee and his role as
Chairman is separate from that of the
Managing Director.
Audit Committee
The Audit Committee comprised of the
following members in the reporting
period:-
Mr John Mngomezulu (Chairman),
HRH Princess Sidvumolesihle and Chief
Ndlaluhlaza Ndwandwe. All the Audit
Committee members are non-executive.
The mandate of the Audit Committee
is to ensure compliance with financial
and regulatory frameworks, good corpo-
rate governance, accountability and
transparency in all transactions and
dealings of Tibiyo Taka Ngwane.
Remunerations Committee
The Remuneration Committee, comprises
four (4) non-executive members. It is
responsible for the assessment and approval
of the remuneration structure of Tibiyo. The
Committee is chaired by Mrs Nokukhanya
Gamedze and the other members are
HRH Prince Simelane, Chief Ndzabankhulu
Simelane, and Mr Khephu Cindzi.
Investments Committee
The Investments Committee comprised
of three members during the reporting
period. They are: Mr. Vusi Fakudze who
is chairman, Mr. Sigodvo Motsa, and Ms.
Lindiwe Dlamini.
This committee advises management on
the placement of Organisational funds. It
also advises management on proposed new
projects before they are brought to the
Main Committee for approval. Additional
adhoc members can be co-opted as and
when necessary.
Financial Statements
The Main Committee is responsible for
ensuring the preparation of the Annual
Financial Statements in a manner that
will present the state of affairs and
results of the business operations of
Tibiyo Taka Ngwane in accordance with
stated accounting policies appropriate to
the business of the organisation, which
have been consistently applied. The
organisation’s External Auditors (KPMG),
carry out an independent audit of the
Annual Financial Statements in accordance
with International Standards of Auditing
and report their findings.
Management
The Management Committee meets regul-
arly, to review operational performance,
capital programmes and other relevant
issues. Consideration is also given,
through well-defined structures, to Tibiyo
investments and capital expenditure
proposals and other issues of strategic
importance to the organisation, for
recommendation to the Main Committee.
Internal Controls
Tibiyo maintains internal controls and
systems designed to provide reasonable
assurance as to the integrity of the
Annual Financial Statements and to
verify and maintain accountability of
the organisation’s assets. Such internal
controls and systems are based on
established policies and procedures and are
implemented by trained personnel. The
effectiveness of these internal controls and
systems is monitored by the organisation’s
External and Internal Auditors.
CORPORATE GOVERNANCE
14 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
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ACTIVITY/PRODUCTS PERCENTAGE HOLDING
AGRICULTURE
Dalcrue Agricultural Holdings (Pty) Ltd Livestock, Sugar cane, Dairy, crops, milling 100.00
Inyoni Yami Swaziland Irrigation Scheme Sugar cane & Livestock 50.00
Sihhoye Estate Sugar cane 100.00
Sivunga Estate Sugar cane 100.00
The Royal Swaziland Sugar Corporation Ltd Sugar cane & Sugar 50.00
Ubombo Sugar Limited Sugar cane & Sugar 40.00
V I F Limited (under Provisional liquidation) Sugar cane 100.00
COMMERCIAL, FINANCE, SERVICES & PROPERTY
Bhunu Mall Property 40.79
Manica Swaziland (Pty) Limited (Dormant) Shipping, Car Rental 25.00
Nedbank (Swaziland) Limited Banking 1.49
Swaziland Development Finance Corporation (FINCORP) SME financier 20.00
Simunye Plaza (Pty) Ltd Property 25.00
The Swazi Observer (Pty) Ltd Newspapers 100.00
Tibiyo Insurance Brokers (Pty) Ltd Insurance Broker 50.00
Tibiyo Properties (Pty) Ltd Property 100.00
MINING
Maloma Colliery Limited Anthracite Coal 25.00
MANUFACTURING & PROCESSING
Parmalat Swaziland (Pty) Ltd Dairy Products 26.00
Swaziland Beverages Limited Beverages 40.00
TOURISM AND TRANSPORT
Royal Swazi National Shipping Corp Ltd (Dormant) Shipping (Containerisation) 76.00
Swazi Spa Holdings Limited Hotels 39.69
Tibiyo Leisure and Resorts (Pty) Ltd, Trading as The Royal Villas Hotel 100.00
Swaziland Empowerment Limited Shareholding 5.41
TIBIYO TAKA NGWANE INVESTMENTS
TIBIYO TAKA NGWANE ANNUAL REPORT 2017 15
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TIBIYO TAKA NGWANE
FINANCIAL STATEMENTSfor the year ended 30 April 2017
Contents Page
Statement of Responsibility by the Main Committee 37
Report of the Independent Auditors 38 - 39
Report of the Main Committee 40 - 41
Statement of Significant Accounting Policies 42 - 45
Statement of Comprehensive Income 46
Statement of Changes in Funds and Reserves 47
Statement of Financial Position 48
Statement of Cash Flows 49
Notes to the Financial Statements 50 - 59
16 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 17
STATEMENT OF RESPONSIBILITY BY THE MAIN COMMITTEE for the year ended 30 April 2017
Statement of Responsibility by the Main Committee
The Main Committee is responsible for the preparation and presentation of the financial statements of Tibiyo Taka Ngwane, comprising
the statement of financial position at 30 April 2017, and the statements of comprehensive income, changes in funds and reserves, and
cash flows for the year then ended, and the notes to the financial statements, which include a summary of significant accounting policies
and other explanatory notes, and the Main Committees’ report, in accordance with the requirements of the entity’s basis of accounting as
described in the notes to the financial statements.
The Main Committee is also responsible for such internal control as they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error and for maintaining adequate accounting records and
an effective system of risk management as well as the preparation of the supplementary schedules included in these financial statements.
The Main Committee has made an assessment of the ability of the entity to continue as going concern and have no reason to believe that
the entity will not be a going concern in the year ahead.
The auditor is responsible for reporting on whether the financial statements are presented in accordance with the applicable financial
reporting framework. The unqualified opinion of KPMG is presented on pages 18 to 20.
Approval of annual financial statements
The financial statements of Tibiyo Taka Ngwane, as identified in the first paragraph were approved by the Main Committee on
2018 and are signed on its behalf by:
___________________ ___________________Chairman Member
Main Committee
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INDEPENDENT AUDITOR’S REPORT To the Main Committee of Tibiyo Taka Ngwane - continued
18 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
Opinion
We have audited the financial statements of Tibiyo Taka Ngwane
set out on pages 21 to 41, which comprise the statement of
financial position as at 30 April 2017, and the statements of
comprehensive income, changes in funds and reserves and
cash flows for the nine month period then ended, and notes
to the financial statements, including a summary of significant
accounting policies and other explanatory notes and the Main
Committees’ report.
In our opinion, the financial statements present, in all material
respects, the financial position of the Tibiyo Taka Ngwane as at
30 April 2017, and its financial performance and cash flows for
the year then ended in accordance with the basis of accounting
described in the statement of significant policies, set out on pages
23 to 27.
Basis for Opinion
We conducted our audit in accordance with International
Standards on Auditing (ISAs). Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are
independent of the Tibiyo Taka Ngwane in accordance with the
Swaziland Institute of Accountants Code of Professional Conduct
(SIA Code) and other independence requirements applicable to
performing audits of financial statements in Swaziland. We have
fulfilled our other ethical responsibilities in accordance with the
SIA Code and in accordance with other ethical requirements
applicable to performing audits in Swaziland. The SIA Code is
consistent with the International Ethics Standards Board for
Accountants Code of Ethics for Professional Accountants (Parts A
and B). We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Other Information
The main committee is responsible for the other information. The
other information comprises the statement of responsibility by
the Main Committee and the Appendices attached to the financial
statements, which we obtained prior to the date of this report.
Other information does not include the financial statements and
our auditor’s report thereon.
Our opinion on the financial statements does not cover the other
information and we do not express an audit opinion or any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If, based on
the work we have performed on the other information obtained
prior to the date of this auditor’s report, we conclude that there is
a material misstatement of this other information, we are required
to report that fact. We have nothing to report in this regard.
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 19
INDEPENDENT AUDITOR’S REPORT To the Main Committee of Tibiyo Taka Ngwane - continued
Responsibilities of the Main Committee for the Financial
Statements
The Main Committee is responsible for the preparation and
presentation of the financial statements in accordance with the
basis of accounting described in the statement of significant
accounting policies set out on pages 23 to 27, for determining
the acceptability of the basis of accounting and for such internal
control as the Main Committee determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Main Committee is
are responsible for assessing the ability of Tibiyo Taka Ngwane
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the Main Committee either intend to liquidate
the entity or to cease operations, or have no realistic alternative
but to do so.
Auditor’s Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with ISAs, we exercise professional
judgement and maintain professional scepticism throughout the
audit. We also:
Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal control.
Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the company’s internal
control.
Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by the Main Committee.
Conclude on the appropriateness of the Main Committees’
use of the going concern basis of accounting and based on
the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant
doubt on the entity’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are
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INDEPENDENT AUDITOR’S REPORT To the Main Committee of Tibiyo Taka Ngwane - continued
20 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may
cause the entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content
of the financial statements, including the disclosures, and
whether the financial statements represent the underlying
transactions and events in a manner that achieves fair
presentation.
We communicate with the Main Committee regarding, among
other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
Auditors
-
TIBIYO TAKA NGWANE ANNUAL REPORT 2017 21
REPORT OF THE MAIN COMMITTEE for the year ended 30 April 2017
The members of the Main Committee have pleasure in presenting
these financial statements for the year ended 30 April 2017.
Nature of the organisation’s business
Tibiyo Taka Ngwane (Tibiyo) was created by the Royal Charter
on 19 August 1968 by King Sobhuza II for the purpose of
managing projects and investments on behalf of the Swazi Nation.
Investments are registered in the name of the iNgwenyama as
Trustee for the Swazi Nation. The organisation is essentially
a developmental agency with the objectives of enhancing the
economic development of Swaziland and the welfare of its citizens
by providing assistance to the Swazi Nation to preserve its customs
and traditional institutions and for the education and training of
its citizens.
To achieve these objectives the organisation seeks to be actively
involved in the establishment of commercially viable projects in all
sectors of the economy. These projects are managed by Tibiyo,
experienced local or international organisations, or operated as
a joint venture with other business partners who have an equity
stake in the project.
Accounting policies
The Royal Charter does not prescribe the accounting framework
or policies to be used and the Main Committee has therefore
developed transparent, entity specific accounting policies, as
described in the statement of significant accounting policies set
out on pages 8 to 11, to meet the financial requirements of the
entity and the users of its financial statements.
The Main Committee is satisfied that this basis of preparation and
presentation is suitable for the intended users of the financial
statements and meets the requirements of the Royal Charter for
the preparation of financial statements.
State of the organisation’s affairs
The organisation’s affairs are fully disclosed in the attached
financial statements.
Members of the Main Committee
The Main Committee is appointed by the iNgwenyama.
Members of the Main Committee as at date of signing these
financial statements were:
HRH Prince Fipha (Chairman)
HRH Prince Simelane
HRH Princess Sidvumolesihle
Chief N Ndwandwe
Chief N Simelane
S Motsa
V Fakudze
M Fakudze (Resigned 31 August 2016)
M Khumalo (Resigned 31 October 2016)
K Cindzi
L Dlamini
N Gamedze
J Mngomezulu (Resigned 01 May 2017)
C Magagula (Appointed 01 August 2017)
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REPORT OF THE MAIN COMMITTEE for the year ended 30 April 2017 - continued
22 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
N Rijkenberg (Appointed 01 November 2017)
Dr. A T Dlamini (Managing Director)
W Z Lomahoza (General Manager)
N F Shongwe (Legal advisor and secretary)
Business address Postal address
Lomawa House P O Box 181
Lozithehlezi Kwaluseni
M201
Auditors
KPMG
Umkhiwa House
Lot 195 Kal Grant Street
Mbabane
Bankers
African Alliance Swaziland
First National Bank of Swaziland Limited
Nedbank Swaziland Limited
Standard Bank Swaziland Limited
Stanlib Swaziland
SwaziBank
Swaziland Building Society
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 23
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The financial statements of the organisation have been prepared in accordance with the accounting policies stated below.
Basis of preparation
The financial statements are presented in Emalangeni, the functional currency of the organisation, rounded to the nearest one Lilangeni.
They are prepared on the historical cost basis except that the following assets are stated at their fair value: investments classified as held
for trading, investments classified as available for sale, cane roots and growing cane. The financial statements incorporate the following
principal accounting policies which are materially consistent with those adopted in the previous financial year.
Consolidation
The organisation does not present consolidated financial statements.
Associated companies
An associated company is one in which Tibiyo Taka Ngwane holds, as a long-term investment, between 20 per cent and 50 per cent of the
equity capital or, where the holding is less than 20 per cent, has significant influence.
The equity method of accounting for associated companies is adopted in the financial statements. In applying the equity method, Tibiyo
Taka Ngwane’s share of accumulated post-acquisition retained earnings and movements in reserves is accounted for from the date on
which the company became an associated company.
The post-acquisition retained earnings and reserves of associated companies attributable to the organisation are transferred to a capital
reserve.
An appropriate impairment is made where, in the opinion of the Main Committee, there has been a permanent diminution in the carrying
value of an investment in an associated company.
The share of associated companies’ retained earnings and reserves are determined from their latest audited financial statements.
-
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
24 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
Investments
Investments are classified for valuation purposes as either held-to-maturity, available-for-sale, held for trading or loans originated by the
organisation. Investments held-to-maturity are classified as non-current assets and are reflected at amortised cost. Investments held
for trading are reflected at fair value with any increase or decrease in fair value recognised in the statement of comprehensive income.
Investments considered to be available-for-sale are reflected at fair value with any resultant gain or loss recognised in the statement of
comprehensive income. Loans originated by the organisation are classified as non current assets and are reflected at cost. Fair value is
determined by the organisation using quoted prices where the investment is traded in an active market or where fair value can be reliably
measured. Where fair value cannot be reliably measured investments are reflected at cost. Income is brought to account to the extent of
dividends declared or interest earned.
Revenue
Revenue comprises revenue earned from sucrose sales, share of partnership earnings, interest and dividends earned from investments.
Revenue from the sale of sucrose is recognised in the statement of comprehensive income when significant risks and rewards of ownership
have been transferred to the buyer.
Dividends earned from investments are recognised in the statement of comprehensive income when they are declared by investee
companies.
Interest income is recognised in the statement of comprehensive income as it accrues, using the effective interest rate method.
Retirement and termination benefits
The policy of the organisation is to provide retirement benefits for all its employees by way of a pension fund or a provident fund. Current
contributions to the pension and provident funds operated for employees are charged against income as incurred. The costs of improved
pension benefits or any deficits arising from time to time on such funds are funded by way of increased future contributions.
Preliminary project expenses
Preliminary project expenses are written off if the project concerned does not become viable and are refunded or capitalised, as an equity
interest, if the project becomes viable.
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 25
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
Acquisition of land and improvements for the Swazi Nation
It is a policy of Tibiyo to purchase land, buildings and other assets on behalf of the Swazi Nation. The land so acquired does not vest in
Tibiyo Taka Ngwane as such but is registered in the name of the iNgwenyama as Trustee for the Swazi Nation. The accumulated costs of
acquisition of such land, improvements and other assets less accumulated depreciation, where applicable, are treated as follows:
Land, improvements and other assets which are utilised and controlled by Tibiyo Taka Ngwane for its various agricultural and other
projects are reflected as property, plant and equipment.
Land, improvements and other assets which are utilised by the community and not controlled by Tibiyo Taka Ngwane are reflected as
a deduction from accumulated funds and reserves.
Property, plant and equipment and depreciation
Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Depreciation is charged
on the straight line basis at rates which will reduce their book values to estimated residual values over the anticipated useful lives of the
assets using the following rates:
Land 0 years
Buildings and capital improvements 50 years
Fencing, water development and other improvements 10 years and 5 years
Motor vehicles 5 and 4 years
Furniture, fittings and equipment 10 and 3.33 years
Assets are depreciated from the date of acquisition to the date of disposal. The basis of depreciation, useful lives and residual values
is assessed annually. Expenditure on repairs and maintenance of property, plant and equipment incurred to restore or maintain future
economic benefits expected from the assets is recognised as an expense when incurred.
Inventories
Inventories are valued at the lower of cost and net realisable value. Cost is determined using the first-in first-out method.
Redundant and slow moving inventories are identified and written down to their estimated net realisable value.
-
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
Subventions
From time to time the organisation grants subventions to wholly owned subsidiaries that are under financial stress in order for these entities
to continue operations in order to meet their developmental goals.
These subventions are approved by the Main Committee.
Swazi Nation development expenditure
Tibiyo Taka Ngwane utilises a portion of its income for:-
(a) the promotion of the health, welfare, education and housing of the Swazi Nation;
(b) the general maintenance and administration of the traditional institutions of the Swazi Nation;
(c) the funding of traditional ceremonies; and
(d) generally, any other purpose the iNgwenyama considers to be beneficial to the Swazi Nation and which will further their interests.
Such expenditure is reflected as Swazi Nation development expenditure and is included in the statement of changes in funds and reserves.
Rental
Rental income is brought to account on a straight line basis over the lease term after deducting maintenance costs.
Financial instruments
Financial assets include cash and bank balances, listed investments and interest earning investments not held to maturity, loans originated
by the organisation, interest earning investments held to maturity and accounts receivable. Cash and bank balances, listed investments
and interest earning investments not held to maturity are carried at fair value. Loans originated by the organisation and interest earning
investments held to maturity are carried at cost and amortised cost. Accounts receivable classified as current assets are carried at cost less
impairment losses.
Financial liabilities include bank overdrafts, accounts payable provisions and loans and borrowings. These are carried at cost and
subsequently measured at amortised costs.
26 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 27
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued
Growing cane
Growing cane is valued at fair value determined by the estimated sucrose content valued at the estimated sucrose price for the following
season, less estimated costs for harvesting and transport
Comparative figures
When an accounting policy has changed and the results thereof are material for the appreciation of the financial position of Tibiyo Taka
Ngwane, the comparative figures are restated in accordance with the new policy.
Cane roots
Tibiyo Taka Ngwane has adopted the amendments made to IAS16 and IAS41 in relation to bearer plants this year. These amendments have
resulted in changes to accounting policies and adjustments to the amounts previously recognised in the financial statements.
In June 2014, the IASB made amendments to IAS 16 Property, Plant and Equipment and IAS 41 Biological Assets which distinguish bearer
plants from other biological assets. Bearer plants are solely used to grow produce over their productive lives and are seen to be similar to
an item of machinery. They will therefore now be accounted for under IAS 16. However, agricultural produce growing on the bearer plants
will remain within the scope of IAS 41 and continue to be measured at fair value less cost to sell.
Sivunga Farm’s cane roots qualify as bearer plants under the revised definition in IAS 41. As required under IAS 8, the change in accounting
policy has been applied retrospectively. As a consequence, the cane roots were reclassified to property, plant and equipment effective 1
May 2015 and comparative figures have been restated accordingly.
The cane roots are now measured using the historical cost method and depreciated over their useful lives which range from five years
to ten years depending on the soil profile and irrigation systems employed. This resulted in a decrease of E 28 364 539 in the opening
balance of cane roots to E 20 554 589 (2016: E 48 919 131).
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28 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
STATEMENT OF COMPREHENSIVE INCOME
Note 2017 2016
E E
Revenue
Third party managed projects 110 522 770 93 588 523
Interest received from investments 6 614 497 4 799 925
Dividends received from investments 162 091 474 118 537 210
Share of partnership earnings 20 522 923 22 018 822
299 751 664 238 944 480
Direct operating expenses
Third party managed projects (96 290 167) (85 600 657)
Operating income for the year 203 461 497 153 343 823
Sundry income 1 32 055 545 7 834 998
Fair value adjustments on biological assets (55 589 051) (213 914)
Effect of change in accounting policy - (28 364 539)
179 927 991 132 600 368
Indirect operating expenses (65 502 475) (50 092 922)
Interest expense 12 (5 877 603) (2 527 397)
Effect of change in accounting policy - (28 364 539)
Net income for the year before subventions 2 108 547 913 79 980 049
Subventions 3 (8 367 271) (14 607 024)
Net income for the year after subventions 100 180 642 65 373 025
Share of associated companies equity earnings 65 369 991 80 054 392
Net income for the year 165 550 633 145 427 417
-
TIBIYO TAKA NGWANE ANNUAL REPORT 2017 29
STATEMENT OF CHANGES IN FUNDS AND RESERVES
Capital Accumulated
reserve funds
E E E
Balance at 1 May 2015 1 098 768 996 571 860 563 1 670 629 559
Net income for the year - 145 427 417 145 427 417
Swazi Nation development expenditure - (109 218 195) (109 218 195)
Transfer of equity losses from capital reserve 80 054 392 (80 054 392) -
Balance at 30 April 2016 1 178 823 388 528 015 393 1 706 838 781
Balance at 1 May 2016 1 178 823 388 528 015 393 1 706 838 781
Effect of change in accounting policy - 28 364 539 28 364 539
Net income for the year - 165 550 633 165 550 633
Swazi Nation development expenditure - (144 469 067) (144 469 067)
Transfer of equity earnings to capital reserve 65 369 991 (65 369 991) -
Balance at 30 April 2017 1 244 193 379 512 091 507 1 756 284 886
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30 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
STATEMENT OF FINANCIAL POSITION
Note 2017 2016 2015 Restated Restated
E E E
ASSETS
Non-current assets
Property, plant and equipment 5 139 526 169 143 383 865 143 383 865
Investments (Appendix 1) 1 501 613 443 1 433 645 561 1 349 393 727
Cane roots 7 - - -
1 641 139 612 1 596 373 731 1 516 619 542
Current assets Inventories 6 2 579 819 4 731 328 965 027Growing cane 7 8 487 717 38 566 511 68 938 000Loans and accounts receivable 8 138 275 652 80 864 075 85 520 884Short term securities 11.2 114 794 370 101 845 549 61 445 146Bank balances and cash 11.2 10 133 787 36 577 44 555
274 271 345 226 044 040 216 913 612
Total assets 1 915 410 957 1 803 073 466 1 710 691 204
FUNDS EMPLOYED AND LIABILITIES
Funds and reserves Capital reserve 9 1 244 193 379 1 178 823 388 1 098 768 996Accumulated funds 512 091 507 528 015 393 571 860 563
1 756 284 886 1 706 838 781 1 670 629 559
Deduct: Land and improvements acquired on behalf of
the Swazi Nation 10 (36 784 344) (36 763 527) (34 839 214) 1 719 500 542 1 670 075 254 1 635 790 345
Non-current liabilities
Loans and borrowings 12 63 601 250 64 027 397 -
63 601 250 64 027 397 -
Current liabilities
Accounts payable 131 062 921 68 393 363 73 438 907
Bank overdrafts 11.2 1 246 244 577 452 1 461 952
132 309 165 68 970 815 74 900 859
Total funds employed and liabilities 1 915 410 957 1 803 073 466 1 710 691 204
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 31
STATEMENT OF CASH FLOWS
Note 2017 2016
E E
Cash flows from operating activities
Cash generated by operations 11.1 153 755 205 108 188 639
Interest received 6 614 497 4 799 925
Interest paid 12 (6 303 750) -
Net cash flows from operating activities 154 065 952 112 988 564
Cash flows from investing activities
Acquisition of land and improvements for the Swazi Nation (20 820) (1 924 313)
Additions to property, plant and equipment (5 007 481) (3 265 019)
Proceeds from disposal of property, plant and equipment 27 173 817 354
Investments acquired (997 891) (4 197 442)
Net cash flows from investing activities 21 147 625 (9 386 420)
Cash flows from financing activities
Subventions (8 367 271) (14 607 024
Swazi Nation development expenditure 4 (144 469 067) (109 218 195)
Proceeds from loans - 61 500 000
Net cash flows from financing activities (152 836 338) (62 325 219)
Net increase/(decrease) in cash and cash equivalents 22 377 239 41 276 925
Cash and cash equivalents at beginning of year 11.2 101 304 674 60 027 749
Cash and cash equivalents at end of year 11.2 123 681 913 101 304 674
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32 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017
2017 2016
E E
1. Sundry income
Rental income 5 522 470 5 651 085
Other income 5 621 176 2 147 420
Interest on staff loans 22 150 36 139
Surplus on disposal of property, plant and equipment 20 889 749 354
32 055 545 7 834 998
2. Net income for the year before subventions
Is arrived at after charging/(crediting):
Audit fee 394 469 358 722
Depreciation of property, plant and equipment 5 435 394 6 058 055
Depreciation of land and improvements acquired on behalf of Swazi Nation 1 165 601 1 384 227
Consultancy fees 320 285 602 174
Investment promotion expenditure 928 033 362 432
Surplus on disposal of property, plant and equipment (20 889 749) (354)
Management fees 1 270 283 1 014 439
Main Committee fees and expenses 1 679 612 1 509 907
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 33
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
2017 2016
E E
3. Subventions
Tibiyo Properties (Proprietary) Limited 890 913 -
The Swaziland Observer (Proprietary) Limited 687 021 948 408
Tibiyo Leisure Resorts (Proprietary) Limited 5 614 535 12 266 132
Dalcrue Agricultural Holdings (Proprietary) Limited 1 174 802 1 392 484
8 367 271 14 607 024
4. Swazi Nation development expenditure
Bursaries and scholarships 38 624 007 31 700 975
Cost of services 6 962 484 5 540 889
Health care 2 075 674 5 511 011
National ceremonies 36 248 331 26 115 112
Sundry expenses 56 849 859 51 609 762
Donations 392 459 108 319
Contract expenditure /(income) 3 316 253 (11 367 873)
144 469 067 109 218 195
-
34 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
Accumulated Net book Cost depreciation value E E
5. Property, plant and equipment
2017
Farms 29 416 794 - 29 416 794
Land, buildings and improvements 137 205 129 (57 918 665) 79 286 464
Motor vehicles 11 830 827 (11 170 912) 659 915
Furniture, fittings and equipment 17 912 527 (11 158 405) 6 754 122
Cane roots 39 257 041 (15 848 167) 23 408 874
235 622 318 (96 096 149) 139 526 169
2016
Farms 34 662 394 - 34 662 394 Land, buildings and improvements 128 430 126 (49 431 727) 78 998 399 Motor vehicles 12 110 718 (10 870 523) 1 240 195 Furniture, fittings and equipment 20 329 414 (12 401 126) 7 928 288 Cane roots 33 874 041 (13 319 452) 20 554 589
229 406 693 (86 022 828) 143 383 865
Opening Closing net book Dis- Depre- net book
value Additions Reversal posals ciation value E E E E E E
5.1 Reconciliation of book
values
2017
Farms 34 662 394 - (5 245 600) - - 29 416 794
Land, buildings and improvements 78 998 399 4 377 148 (1 007 376) - (3 081 707) 79 286 464
Motor vehicles 1 240 195 295 109 - - (875 389) 659 915
Furniture, fittings and equipment 7 928 288 335 224 (31 092) - (1 478 298) 6 754 122
Cane roots 20 554 589 6 116 223 - - (3 261 938) 23 408 874
143 383 865 11 123 704 (6 284 068) - (8 697 332) 139 526 169
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 35
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
Opening Closing
net book net book value Additions Disposals Depreciation value E E E E E
5.1 Reconciliation of book values
2016
Farms 34 662 394 - - - 34 662 394
Land, buildings and improvements 80 452 220 3 044 567 - (4 498 388) 78 998 399
Motor vehicles 2 085 831 - - (845 636) 1 240 195
Furniture, fittings and equipment 8 421 867 220 452 - (714 031) 7 928 288
Cane roots 18 830 848 3 606 826 - (1 883 085) 20 554 589
144 453 160 6 871 845 - (7 935 140) 143 383 865
2016 2015
E E
6. Inventories
Fuel 138 192 211 699
Cattle for ceremonies 2 441 627 4 519 629
2 579 819 4 731 328
-
36 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
7. Growing crop
7.1 Description of principal activities
The organisation’s fields are situated in the Big Bend and Tshaneni areas and consist of 2 761 hectares (2016: 2 761 hectares) of
sugar cane. The management, planting and harvesting of sugar cane has been outsourced to two related party companies involved
in similar operations. Fields are managed on a sustainable basis with approximately 11% of the area replanted per annum.
Cane roots
E
7.2 Reconciliation of carrying amounts
Carrying amount at 1 May 2016 38 566 511
Adjustment for changes in fair values (55 589 051)
Carrying amount at 30 April 2016 31 896 591
7.3 Measurement base
Cane roots and growing cane are valued at fair value as detailed in the accounting policy. Agricultural land is carried at cost.
7.4 Specific risk management strategies
The organisation follows prudent industry accepted care practices with respect to the use of fertilisers, insecticides and herbicides
to control growth, diseases and insect infestation. The organisation does not insure growing crops in the fields.
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 37
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
2017 2016
E E
8. Loans and accounts receivable
Related party receivables 38 488 437 43 737 410
Other receivables 42 375 638 41 783 474
80 864 075 85 520 884
9. Capital reserve
Balance at beginning of year 1 098 768 996 871 455 175
Share of equity earnings
Current year earnings 80 054 392 227 313 821
Balance at end of year 1 178 823 388 1 098 768 996
10. Land and improvements acquired on behalf of the Swazi Nation
Buildings 3 220 877 3 220 877
Farms 12 469 856 12 469 856
Mineral rights 354 994 354 994
Other assets 20 717 800 18 793 487
36 763 527 34 839 214
-
38 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
2017 2016 E E
11. Notes to the statement of cash flows
11.1 Cash generated by operations
Net income for the year before subventions 108 547 913 79 980 049 Adjusted for:
Depreciation of property plant and equipment 5 435 394 7 935 140
Interest income received (6 614 497) (4 799 925) Interest expense 5 877 603 2 527 397 Provision reversal (1 600 000) - Surplus on disposal of property, plant and equipment (20 889 749) (354) Effect of change in accounting policy - 28 364 539
Change in fair value of growing cane 52 327 113 1 663 171
Net operating income for the year before working capital changes 146 345 715 112 343 675 Decrease/(increase) in inventories 2 151 509 (3 766 301) (Increase)/ decrease in loans and accounts receivable (57 411 577) 4 656 809
Increase/ (decrease) in accounts payable 62 669 558 (5 045 544)
153 755 205 108 188 639
11.2 Cash and cash equivalents
Cash and cash equivalents included in the cash flow statement comprise the following balance sheet amounts:
Opening balances
Bank balances and cash 36 577 44 555
Short term securities 101 845 549 61 445 146
Bank overdrafts (577 452) (1 461 952)
101 304 674 60 027 749
Closing balances
Bank balances and cash 10 133 787 36 577
Short term securities 114 794 370 101 845 549
Bank overdrafts (1 246 244) (577 452)
123 681 913 101 304 674
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 39
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
2017 2016 E E
12. Loans and borrowings
Opening balance 64 027 397 -
Loan amount - 60 000 000
Transaction costs - 1 500 000
Interest expense 5 877 603 2 527 397
Interest repayments (6 303 750) -
Loans and borrowings 63 601 250 64 027 397
On 20 January 2015, Tibiyo Taka Ngwane set up a subsidiary known as Structco (Proprietary) Limited. The company is to carry on the business of an investment company and to invest in immovable and movable property, shares, stocks and debentures. Structco issued 10.25% redeemable debentures to African Alliance and subsequently provided a loan to Tibiyo Taka Ngwane at an interest of 10.25%. The principal amount is E61 500 000, which includes E1 500 000 transaction costs. The loan is secured over the shares held by Tibiyo Taka Ngwane at the Royal Swaziland Sugar Corporation and is payable in a lump sum at the end of its 5 year term, 31
December 2020. Interest is payable annually.
13. Retirement benefits
All eligible employees belong to a defined benefit pension or a provident fund. The pension fund is actuarially valued, in terms of the rules of the fund, every three years. The latest valuation was carried out at 30 April 2012, which revealed a surplus of E99 344.
The 2017 actuarial valuation had not been carried out as at the day of issue of these financial statements.
The provident fund is actuarially valued every year. The last valuation was carried out as at 30 April 2015 which revealed a deficit of E71 679. The 2017 actuarial valuation had not been carried out as at the day of issue of these financial statements.
The organisation made contributions amounting to E2 150 147 (2016: E2 108 006) to the funds during the year.
14. Employees and employment costs
The number of employees employed by the organisation at year-end was 81 (2016: 86).
Employment costs during the year for the organisation amounted to E29 761 795 (2016: E29 328 032).
15. Related parties
15.1 Related parties comprise subsidiaries, associates and members of the Main Committee. Details of balances for income received
from subsidiaries and associates are set out in Appendix 1 of the financial statements.
Related party transactions comprise dividends received, subventions paid, retains fees, sitting allowances and interest received. Certain reimbursive expenditure is recouped by related parties.
-
40 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
15. Related parties (continued)
15.2 Related party contingent liabilities and commitments
Related party contingent liabilities and commitments are disclosed in note 16.
Details of related party balances and transactions are disclosed in the appendices to these financial statements.
16. Financial instruments
Financial assets of the organisation include investments, cash and bank balances, loans and accounts receivable. Financial liabilities
of the organisation include bank overdrafts, loans and borrowings and accounts payable. Accounting policies for financial assets and
liabilities are set out in the statement of accounting policies.
Interest rate risk
Bank overdrafts loans and borrowings and bank balances attract interest at rates linked to the prime overdraft rate as applicable in
Swaziland on a floating rate basis.
Credit risk
Credit risk represents the accounting loss that would be recognised at financial year-end in the event of non-payment by debtors.
The organisation has no significant credit risk exposures. To reduce exposure to credit risk the organisation performs ongoing credit
evaluations of the financial conditions of its debtors and obtains collateral as necessary. The organisation invests available cash and
cash equivalents with banks. The organisation is exposed to credit related losses in the event of non-payment but does not expect
any significant debtor to fail to meet its obligations.
Foreign exchange hedge instruments and exposures
The organisation had no foreign exchange hedge instruments outstanding or any foreign currency exposures at financial year-end.
Fair values
The balances, as reflected in the statement of financial position, of financial instruments of the organisation are not materially
different from their carrying amounts.
17 Contingent liabilities and guarantees
17.1 As part of its bank facilities the organisation has the following performance guarantees:
Cession of rental in terms of lease contracts dated 14 December 2006 to Standard Bank.
Surety bond for E7 000.00 with Nedbank Swaziland Limited in favour of Customs and Excise dated 4 July 2001.
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 41
NOTES TO THE FINANCIAL STATEMENTSfor the year ended 30 April 2017 - continued
17. Contingent liabilities and guarantees (continued)
17.2 The organisation grants scholarships to students for educational purposes. Certain conditions are attached to the scholarships
and these may be revoked should students not comply. It is the organisation’s policy to provide for scholarships payable in the
following year, whilst amounts due thereafter are considered to be contingent on students complying with all the conditions
attached to the scholarships. Renewal of the scholarships is at the discretion of the organisation. The organisation has
commitments in respect of scholarships awarded which would be payable as shown below:
2017 2016
E E
Payable in the next year and included in accounts payable 25 854 224
Payable between 2 and 5 years 60 082 439
85 936 663
17.3 The entity has sub-ordinated its loan to Dalcrue Agricultural Holdings (Pty) Limited in favour of other creditors until the assets of
Dalcrue Agricultural Holdings (Pty) Limited fairly valued exceed its liabilities.
17.4 The entity has sub-ordinated its loan to Tibiyo Leisure Resorts (Proprietary) Limited in favour of other creditors until the assets
Tibiyo Leisure Resorts (Proprietary) Limited fairly valued exceed its liabilities.
17.5 The entity has sub-ordinated its loan to Tibiyo Properties (Proprietary) Limited in favour of other creditors until the assets of Tibiyo
Properties (Proprietary) Limited fairly valued exceed its liabilities.
17.6 The entry was pledged its shareholding at Royal Swaziland Sugar Corporation to the favour of African Alliance Securities Trading
(Proprietary) Limited on behalf of a debenture by its subsidiary Structco (Pty) Limited to the value of E120 million.
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42 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
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TIBIYO TAKA NGWANE ANNUAL REPORT 2017 43
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44 TIBIYO TAKA NGWANE ANNUAL REPORT 2017
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E-mail: [email protected]: www.tibiyo.com